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HomeMy WebLinkAboutSan Bernardino Valley Municipal Water District-2011-27 C ( 1- ) I • SETTLEMENT AND RELEASE AGREEMENT This Settlement and Release Agreement(herein, "Agreement")is made and entered into as of September 13 , 2011 (the "Effective Date"), by and among the CITY OF GRAND TERRACE, a municipal corporation (the "City"), the REDEVELOPMENT AGENCY OF THE CITY OF GRAND TERRACE, a public body, corporate and politic (the "Agency"), and the SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT, a California municipal water district (the "Water District"). The City, the Agency and the Water District are referred to collectively herein as the"Parties"and individually as a"Party,"with regard to the following: 1. The County of San Bernardino ("County") is authorized to allocate certain property tax revenues pursuant to statutory authority and the terms of that certain agreement entered into by and among the County, the Water District, and the City, entitled "Grand Terrace Redevelopment Agency Settlement Agreement", dated as of April 21, 1980, as amended by that agreement dated as of November 23, 1981, entitled `Grand Terrace Redevelopment Agency Settlement Agreement" by and among the County, the City and the Agency (as so amended, the "Payment Administration Agreement"). 2. In connection with its activities under statute and under the Payment Administration Agreement, the County made certain technical errors with respect to the allocation of property tax revenue for tax years (a) 2008-09 ("Year 1") and (b) 2009-10 ("Year 2"), the County failed to correctly identify and disburse certain amounts to the Water District, which amounts were attributable to a tax override duly authorized on behalf of the Water District (the "Designated Override Amounts"). The Designated Override Amounts were, instead, incorrectly disbursed to the Agency, wrongfully appearing to constitute tax increment revenues under Health and Safety Code Section 33670(b). The Designated Override Amounts incorrectly disbursed to the Agency represented approximately $1,211,905.00 with respect to Year 1 and approximately $1,083,485.00 with respect to Year 2,for a total of approximately$2,295,360.00 (the"Water District Amount"). 3. Agency acknowledges receipt of such incorrect disbursements and agrees to repay the Water District an amount equal to the Water District Amount, as provided in the remainder of this Section 3. The principal of the Water District Amount shall accrue interest, based upon the outstanding balance thereof, at the applicable variable rate established for investments as established from time to time by the California Local Agency Investment Fund (LAIF) (the "LAIF Rate"). Payment of the Water District Amount shall be accomplished by the Agency in ten (10) substantially equivalent annual installments of $229,536.00 made pursuant to the terms of this Agreement, including without limitation Section 4 hereof. Payments shall be made as provided in Section 4.2 hereof. Agency hereby acknowledges and agrees that it shall be solely responsible for the timely and full discharge of all payment obligations contemplated in this Section 3 and the Agreement and that the City shall have no obligation of any kind to contribute or otherwise make payments under this Agreement,nor will the County make or administer payments under this Agreement. At such time as the Agency prepares an enforceable obligation schedule (as provide pursuant to Chapter 5, statutes of 2011), the Agency shall include its obligation to the Water District for payment to the Water District Amount among the listed obligations of the Agency. Agency further acknowledges that the payment obligation contemplated by this Agreement: (i) is reflected as a current debt obligation on the records of the Agency; (ii) existed, and was owed to the Water District prior to the introduction of ABXI 26 and ABXI 27; and (iii) shall not be affected or impaired by any failure to include or identify the Water District Amount on the enforceable obligation schedule. 1 DOCSOC/1487186v 11/022092-0002 4. Payment Terms. 4.1 Interest ("Interest") shall accrue on the unpaid and outstanding balance of the Water District Amount commencing from the Effective Date and continuing until repayment in full of the Water District Amount at the LAIF Rate, with accrued but unpaid Interest also bearing Interest. (i) Notwithstanding any other provision contained herein, in no event shall Interest payable hereunder exceed the maximum rate permitted under applicable law. If Agency makes payments of Interest, fees or other charges, however denominated, which are determined to result in an interest rate that exceeds the maximum rate of interest payable under applicable law, then any such excess is hereby waived by Water District and shall automatically and from the date of payment be applied in reduction of the Water District Amount, or, if such excess is greater than the unpaid Water District Amount, the difference shall be paid by Water District to Agency. 4.2 Payments and Due Date. All payments shall be due and payable to Water District in ten(10)annual installments beginning on the thirtieth (30th)day after a judgment by the Supreme Count becomes final with respect to the constitutionality and validity of ABX1 26 and ABXI 27(the"Initial Due Date")and each subsequent annual payment to be made on the succeeding nine anniversaries of the first payment date. (i) As of the ninth anniversary of the Initial Due Date, any remaining unpaid principal of the Water District Amount, and all accrued but unpaid interest, shall be immediately due and payable. (ii) Notwithstanding any other provision contained herein, all remaining amounts to be paid by Agency hereunder shall become immediately due and payable upon the earlier to occur of: A The ninth anniversary of the Initial Due Date;or B An election by Water District upon the occurrence of an Event of Default(as defined hereafter). (iii) Unless otherwise specifically designated in writing at the time of payment and agreed to by Water District, payments shall be credited first to late charges and unpaid costs of collection following a default, second to Interest and third to the principal amount of the Water District Amount(herein,"Principal"). 4.3 Agency's Right to Prepay. Agency shall have the right, but not obligation, to prepay at any time without penalty all or any remaining amount owing under this Agreement. Unless otherwise specifically designated in writing at the time of payment and agreed to by Water District, any such prepayment shall be credited first to late charges and unpaid costs of collection following a default,second to Interest and third to Principal. 4.4 Late Charge. If any amount of Interest and/or Principal is not received by Water District within three (3) days after its due date, then, without any requirement for notice to 2 DOCSOC/1487186v 11/022092-0002 Agency, Agency shall immediately pay to Water District an additional sum of ten percent (10%) of such overdue amount as a late charge. Such late charge represents a fair and reasonable estimate of the costs that Water District will incur by reason of any late payment by Agency. Acceptance of such late charge by Water District shall not constitute a waiver of Agency's default with respect to such overdue amount, nor prevent Water District from exercising any of the other rights and remedies available to Water District under this Agreement. 4.5 Default. (i) Upon the occurrence of an Event of Default (as defined hereafter) in addition to any other available remedies under this Agreement, Water District may elect to accelerate the timing of any amounts remaining unpaid hereunder, causing such sums to become immediately due and payable. (ii) Each of the following shall constitute an event of default hereunder ("Event of Default"), and, at Water District's election, shall entitle Water District to accelerate the entire unpaid indebtedness represented by this Agreement: A A payment required under this Agreement has not yet been received by Water District within thirty(30)days from its due date;or B Agency's breach of any other obligation contained in this Agreement. 4.6 Cure. (i) Cure. Notwithstanding any other provision contained herein, Agency may cure what would otherwise constitute an Event of Default in accordance with the provisions of this Section. (ii) Cure of Nonpayment Default. In the event of an Event of Default not involving a payment required under the provisions of this Agreement, Water District shall tender written notice ("Default Notice")to Agency detailing the breach ("Stated Default"). If Agency does not adequately cure the Stated Default within thirty (30) days from receipt of the Default Notice ("Default Cure Period"),then Agency shall be deemed to be in default of this Agreement, unless the Stated Default cannot reasonably be cured within said thirty (30) days. In such a case, if Agency commences cure within the thirty(30)day period and completes the cure as soon as possible,Agency shall be allowed a reasonable time to complete the cure unless that time period will exceed sixty (60) days. Any Event of Default that cannot be cured within thirty(30) days cannot be cured, unless such period is specifically extended in writing by Water District. (iii) Cure of Payment Default. In the event of an Event of Default involving a payment required under the provisions of this Agreement, Water District shall tender Default Notice to Agency detailing the Stated Default. If Agency does not adequately cure the Stated Default within thirty(30) days from receipt of the Default Notice,then Agency shall be deemed to be in default of this Agreement. 5. The Parties mutually agree that,except as otherwise expressly provided in Sections 1 to 4(inclusive)hereof, it will not promote governmental efficiency or sound public policy, but would 3 DOCSOC/1487186v1 1/022092-0002 instead result in added administrative costs to all Parties hereto, for the County to review and recalculate the payment of such amounts, if any, which were properly identifiable as override payments to the Water District but which may have otherwise been incorrectly disbursed to the Agency. Accordingly, the Parties agree that no review or payments are appropriate, and no such payments shall be made to Water District, for any periods prior to Year 1 or as otherwise specifically set forth in this Agreement and the Water District hereby releases and exonerates the Agency from any liability or responsibility therefor. 6. Notices. All notices or other communications permitted or required under this Agreement (collectively "Notices' and individually "Notice') shall be in writing and shall be sufficiently given if and when hand delivered to the persons set forth below,or if sent by documented overnight delivery service or registered or certified mail,postage prepaid, return receipt requested,or by facsimile or electronic mail (but only if a facsimile and/or e-mail address is set forth below), receipt acknowledged, addressed as set forth below or to such other person and/or at such other address, facsimile or e-mail as shall be furnished in writing by any Party hereto to the other. Any such Notice shall be deemed to have been given as of the date received, in the case of personal delivery, or on the date shown on the receipt or confirmation therefore in all other cases. If to Water District: San Bernardino Valley Municipal Water District 1380 East Vanderbilt Way San Bernardino, California 92408 Attn: Douglas Headrick, General Manager Telephone No. (909) 387-9226 Facsimile No. (909)387-9247 If to Agency: Redevelopment Agency of the City of Grand Terrace 22795 Barton Road Grand Terrace, California 92313-5295 Attn: Betsy Adams, Executive Director Telephone No. (909)320-2245 Facsimile No. (909)783-7629 A copy of each Party's Notice(s)to: Vamer&Brandt LLP 3750 University Avenue, Suite 610 Riverside, California 92501 Attn: Bruce D. Varner,Esq. Telephone No. (951) 274-7777 Facsimile No. (951)274-7770 and Stradling Yocca Carlson&Rauth a Professional Corporation 660 Newport Center Drive, Suite 1600 Newport Beach, California 92660 Attn: Mark J. Huebsch,Esq. Telephone No. (949) 725-4167 Facsimile No. (949) 823-5167 4 DOCSOC/1487186v 11/022092-0002 7. General Provisions. 7.1 This Agreement shall remain in effect until the thirtieth day following the ninth anniversary of the Initial Due Date, and shall not be changed or modified except by written agreement of the Parties. In the event payments contemplated hereunder, and evidenced by the Agreement remain outstanding after the thirtieth day following the ninth anniversary of the Initial Due Date, all obligations and rights granted by this Agreement and the Agreement shall survive. 7.2 Except as expressly set forth herein, the Agency, the City and the Water District each agree to bear its own attorneys' fees and costs incurred in connection with the litigation prior to this Agreement and the settlement thereof as well as the negotiation, preparation, approval, execution and delivery of this Agreement. 7.3 Should any lawsuit, action, motion, or proceeding be brought by a Party hereto to enforce, interpret, avoid, nullify, reform, rescind or seek damages for alleged breach of this Agreement, then the prevailing Party in such a proceeding shall be entitled to be reimbursed by the non-prevailing Party (or Parties) for all reasonable out-of-pocket costs and expenses incurred as a result of enforcing or pursuing such rights, remedies or interests, including but not limited to, reasonable attorneys' fees, expert or consultant fees and costs for the services rendered to such prevailing Party. 7.4 In the event a Party to this Agreement is in default of its respective obligations, the Party asserting such default shall provide written notice to the defaulting Party identifying such default and indicating that such default must be cured within thirty(30) days, unless a Party's breach is subject to a shorter cure period. If the defaulting Party fails to cure within the thirty (30) day cure period, the non-breach Party shall be entitled to seek all remedies available, either based in law or in equity. 7.5 The Agency, the City and the Water District agree to meet and confer seven (7) days prior to instituting any formal legal action or motion regarding interpretation and/or enforcement of this Agreement, excepting where another Party to this Agreement proposes to take actions which, if taken,would prejudice the rights of the other Party if the meet and confer process is undertaken. 7.6 This Agreement shall be governed by, construed, and enforced in accordance with, the laws of the State of California. Any legal proceeding sought to enforce or interpret this Agreement shall be brought in the Superior Court of California located in the County of San Bernardino. 7.7 Calendar Days. For purposes of this Agreement, the word "day" or "days," whether capitalized,or not, shall refer to calendar days. 7.8 Attorneys' Fees. If any Party reasonably retains counsel for the purpose of enforcing or preventing the breach of any provision of this Agreement, for recovering damages for an alleged breach of any provision hereof, for a declaration of such Party's rights or obligations hereunder, or for any other judicial or non-judicial remedy, which term includes arbitration, the prevailing Party shall be entitled, in addition to such other relief as may be granted, to be reimbursed by the losing Party for all costs and expenses incurred thereby, including, but not limited to, reasonable attorneys' fees and costs for the services rendered to such prevailing Party. 5 DOCSOC/1487186v 11/022092-0002 7.9 Modification. Except as otherwise specifically provided herein or by operation of law, any provision contained in this Agreement may be modified, but only by the unanimous written consent of the Parties. 7.10 Assignment. If Water District assigns its interests to receive payment under this Agreement, such assignment shall not be of any effect to Agency until Water District has properly notified Agency in writing of such assignment and provides Agency with sufficient information regarding the assignee to permit Agency to make payments thereto. Agency may not assign any of its rights or obligations to any other party without the express consent of Water District. 7.11 Extensions. Water District may, in its sole discretion, grant Agency any extensions of time for payment of any of the indebtedness, or grant any other indulgences or forbearances whatsoever,without notice to Agency and without affecting, in any way,the liability of Agency. 7.12 Faxed/Mechanical/Stamped Signatures. All fax, mechanical and/or stamped signatures shall be treated as original signatures ("Associated Signature(s)") that are associated with this Agreement, as long as affixed to the particular document with the approval of the person whose signature is represented by the Associated Signature. There shall be a rebuttable presumption that an Associated Signature was affixed to the particular document with the consent of the person whose signature is represented thereby. 7.13 This Agreement shall be and is binding upon and inures to the benefit of the Agency,the City,the Water District,and their respective successors and assigns. 7.14 In the event the Agency is dissolved pursuant to Chapter 5 of Statutes of 2011, the City will support the payment by an oversight board of all amounts due and payable hereunder to the Water District. This Agreement shall in no way impair, reduce or otherwise adversely affect any rights or claims, of any kind or nature, the Water District may have against any successor agency, or any oversight board ordered or responsible for the satisfaction of outstanding obligations of the Agency. 7.15 This Agreement shall be interpreted as if equally prepared by all Parties hereto. 7.16 This Agreement constitutes the final expression of the terms included therein and the complete and exclusive statement of the agreement among the Parties with respect to the subject matter hereof, and any other prior or contemporaneous oral or written agreements respecting its subject matter are merged with and into this Agreement and shall have no force or effect whatsoever. 7.17 This Agreement includes all of the representations of every kind and nature made by the Parties,one to the other, whether oral or written, in connection with or as an inducement to enter into this Agreement. The Parties acknowledge that they have in good faith mutually participated in the negotiation of this Agreement. Each Party further acknowledges that it has read this Agreement and is fully aware of and understands all of the terms and consequences thereof and is voluntarily executing this Agreement in good faith. Each Party further acknowledges that no other Party, agent, or attorney of any other Party herein has made any promise, representation, or warranty 6 DOCSOC/1487186v 11/022092-0002 whatsoever, written or oral, express or implied, not contained in this Agreement concerning the subject matter thereof, to induce it to authorize the execution thereof, and acknowledges that it has not authorized the execution of this Agreement in reliance upon any such promise, representation, or warranty not contained herein. 7.18 If any provision of this Agreement shall be determined to be invalid or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall not be affected thereby and shall remain valid and enforceable to the fullest extent permitted by law. Any provision determined to be invalid or unenforceable shall be deemed replaced, if permitted by law, by a valid and enforceable provision that, to the maximum extent possible, reflects the Parties' intent in the invalid or unenforceable provision. GRAND TERRACE REDEVELOPMENT AGENCY �J By: i7' /,44Li9 E ecutive Director SAN BERNARDINO VALLEY MUNI IPAL ATER DISTRICT By: G1.GL � GeOral Manager CITY OF GRAND TERRACE City/Manager 7 DOCSOC/1487186v11/022092-0002